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Manchester United’s latest financial results reveal significant challenges in complying with the Premier League’s profit and sustainability rules (PSR).
United posted a £71.4 million net loss for the three months ending March 31, 2024, bringing the total pre-tax loss for the 2023-24 financial year to £89.2 million.
According to The Athletic, these figures indicate potential difficulties in adhering to the PSR, which allows a financial loss of £105 million over three years, contingent on £90 million being covered by owner-secured funding.
Financial expert Kieran Maguire claims, significant deductions from United’s three-year loss figure, currently standing at £271.4 million, include spending on infrastructure, women’s football, youth development, community work, and Covid-19-related expenses.
Despite these deductions, the club’s financial situation remains precarious.
United’s decision to loan Jadon Sancho and Donny van de Beek in January is expected to provide some financial relief. Nevertheless, the club’s latest accounts show that they are still at risk of breaching the PSR, although they did not rush to sell players before the end of June, a common strategy to comply with financial regulations.
If United breach the PSR, the most likely consequence is a points deduction.
Everton and Nottingham Forest faced similar penalties last season, with Everton initially docked ten points, later reduced to six after an appeal and an additional two points for a further breach.
Nottingham Forest received a four-point deduction for their infractions.
Revenue figures for United show a mixed picture.
Although the latest quarterly results indicate a 20% decrease in overall revenue to £136.7 million compared to the same period last year, United are still on track to post a record annual revenue.
The decline is attributed to fewer matches played, particularly at Old Trafford.
However, participation in the Champions League has boosted overall revenue for the first nine months of the financial year by 8%.
Despite having £67 million in the bank as of March 31, United’s debt levels remain substantial.
Principal debt stands at $650 million, with revolving credit borrowings at £143 million, though this is down from £203.7 million in the previous year.
Interest payments exceed £1 million per week, highlighting the financial burden imposed by the Glazers’ ownership.
The accounts also reveal that United paid nearly £30 million to Raine Group for facilitating the sale of a 27.7% stake to Sir Jim Ratcliffe, bringing total fees to over £39.9 million.
This expenditure further strains United’s financial resources, necessitating a disciplined approach to transfer negotiations for the remainder of the summer.
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